2016 Development Cost Charges Bylaw Update

Transcription

1 2016 Development Cost Charges Bylaw Update Development Cost Charges (DCC s) are levies collected by local governments to assist in financing the costs of infrastructure and parks expenditures required to service new growth. Section 559 of the Local Government Act provides the authority for municipalities to collect DCC s through its DCC bylaw. The City of North Vancouver is currently undertaking a review and update of its Development Cost Charges program, which was last updated in The DCC update has been prepared following Provincial legislation and best practices developed by the Ministry of Community, Sport and Cultural Development. The DCC Bylaw requires review and approval by the Ministry before it can be adopted by City Council. The proposed Bylaw received first reading from Council on March 7, 2016 and the City is now consulting with key stakeholders and the community to receive input prior to second and third readings in April/May Final bylaw adoption is anticipated in summer, If you have any comments on the proposed DCC Bylaw, please forward them to finance@cnv.org before 4:00 pm on April 15, Background information: Proposed Development Cost Charges Bylaw, 2016, No Report to Council dated March 2, 2016 Development Cost Charge Review and Update Background Report Development Cost Charge Review Current DCC schedule of fees: Development/Development-Cost-Charges Proposed DCC Rates Will Not Apply to In-Stream Applications The new DCC rates will be in force immediately following adoption of Development Cost Charges Bylaw, 2016, No However, the Local Government Act (LGA) provides special protection from rate increases for development applications that are submitted prior to the adoption date. In-stream protection applies to both building permit and subdivision applications received prior to the adoption of the new DCC Bylaw. Protection is also extended to rezoning and development permit applications that are submitted prior to the adoption of the new DCC Bylaw and that result in an issued building permit within 12 months of the adoption of the Bylaw. Sections 511 and 568 of the LGA outline the criteria that must be met in order for an application to qualify for in-stream protection. If an application meets the required criteria and is submitted prior to the adoption of the new DCC Bylaw, it will be provided protection from rate increases for a period of twelve months after the adoption date. Note that existing DCC waivers, including the waiver for non-profit housing and reduced DCCs for rental housing will continue to apply under the proposed changes. For further information or clarification, please contact Navin Chand at nchand@cnv.org or Document: v1

2 THE CORPORATION OF THE CITY OF NORTH VANCOUVER BYLAW NO A Bylaw to Impose Development Cost Charges for the City of North Vancouver WHEREAS pursuant to the Local Government Act, the Council of The Corporation of The City of North Vancouver may, by Bylaw, impose development cost charges for the purpose of providing funds to assist the municipality in paying for the capital cost of providing, constructing, altering, or expanding sewage, water, drainage, highway facilities, for acquiring park land or providing specified improvements on park land or any of them, in order to serve, directly or indirectly, the development in respect of which the charges are imposed; WHEREAS in fixing development cost charges imposed by this bylaw the Council has taken into consideration future land use patterns and development, the phasing of works and services and the provision of park land described in an official community plan and whether the charges: a. are excessive in relation to the capital cost of prevailing standards of service in the municipality; b. will deter development in the municipality; and, c. will discourage the construction of reasonably priced housing or the provision of reasonably priced serviced land in the municipality; AND WHEREAS in the opinion of the Council the charges imposed by this bylaw are related to capital costs attributable to projects involved in the capital expenditure program of the municipality; NOW THEREFORE the Council of The Corporation of the City of North Vancouver, in open meeting assembled, enacts as follows: 1. This Bylaw shall be known and cited for all purposes as Development Cost Charges Bylaw, 2016, No In this Bylaw: Apartment means a building divided into not less than three dwelling units with each dwelling unit having its principal access from a finished grade level entrance common to all dwelling units. When combined with a commercial use where permitted in this Bylaw, a building containing fewer than three dwelling units is an apartment, provided that it complies with the rest of this definition. Building permit means any permit required by the City that authorizes the construction, alteration or extension of a building or structure. City means The Corporation of the City of North Vancouver. Commercial means any commercial use as permitted under the authority of the City s Zoning Bylaw. Council means the Council of the City of North Vancouver. The Corporation of the City of North Vancouver Page 1 Bylaw, 2016, No Document: v1

3 Dwelling Unit means a Dwelling Unit as defined in the City s Zoning Bylaw. Duplex means a Two-Unit Residential Use as defined in the City s Zoning Bylaw. Gross Floor Area means the Gross Floor Area of a building or structure, as defined in the City s Zoning Bylaw. Industrial means any industrial use as permitted under the authority of the City s Zoning Bylaw. Single Family Residential means a One-Unit Residential Use as defined in the City s Zoning Bylaw, and includes an accessory coach house or secondary suite. Subdivision means a subdivision of land into two or more parcels, whether by plan, apt descriptive words or otherwise, under the Land Title Act or the Strata Property Act. Townhouse means a building divided into not less than three dwelling units with each dwelling unit having direct access to finished grade level. Zoning Bylaw means the City of North Vancouver Zoning Bylaw, 1995, No. 6700, as amended. 3. Every person who obtains: A. Approval of a subdivision approval of a subdivision of a parcel of land under the Land Title Act or the Strata Property Act; or B. A building permit authorizing the construction or alteration of a building or structure; including a building permit that authorizes the construction or alteration of a building or part of a building that will, after the construction or alteration, contain one or more self-contained dwelling units; shall pay to the City, prior to the approval of the subdivision or the issuance of the building permit, as the case may be, the applicable development cost charges as set out in Schedule A hereto attached. 4. No development cost charge is payable where: A. The building permit authorizes the construction, alteration or extension of a building or part of a building that is, or will be, after the construction, alteration or extension, exempt from taxation under the Community Charter; B. The building permit authorizes the construction or alteration of a building where the value of the work authorized by permit does not exceed $50,000; C. The size of the dwelling unit is 29 square metres or less; or D. A development cost charge has previously been paid for the same development unless, as a result of further development, new capital cost burdens will be imposed on the City. The Corporation of the City of North Vancouver Page 2 Bylaw, 2016, No Document: v1

4 5. Pursuant to Section 561(6) of the Local Government Act, a Development Cost Charge is payable for construction, alteration or extension of a building that will, after the construction, alteration or extension, contain fewer than 4 self-contained dwelling units. 6. This bylaw shall come into full force and effect and be binding on persons as and from the date of final adoption of this bylaw. 7. Development Cost Charges Bylaw, 1997, No. 6814, and all amending bylaws, are hereby repealed in their entirety. READ a first time by the Council on the 7 th day of March, READ a second time by the Council on the <> day of <>, READ a third time and passed by the Council on the <> day of <>, RECEIVED APPROVAL FROM THE INSPECTOR OF MUNICIPALITIES ON THE <> DAY OF <>, ADOPTED by the Council, signed by the Mayor and City Clerk and affixed with the Corporate Seal on the <> day of <>, MAYOR CITY CLERK The Corporation of the City of North Vancouver Page 3 Bylaw, 2016, No Document: v1

5 Development Cost Charges Bylaw, 2016, No Land Use Transportation Park Acquisition and Development Single Family Residential Schedule A Water Sanitary Sewer Drainage TOTAL $5,315 $4,614 $1,513 $1,477 $1,830 $14,749 per lot Duplex $20.89 $21.48 $7.04 $6.88 $5.88 $62.17 per m 2 gross floor area Townhouse $20.89 $21.48 $7.04 $6.88 $5.88 $62.17 per m 2 gross floor area Apartment $20.89 $21.48 $7.04 $6.88 $5.88 $62.17 per m 2 gross floor area Commercial $48.32 $2.56 $0.84 $0.82 $5.49 $58.03 per m 2 gross floor area Industrial $28.99 $2.56 $0.84 $0.82 $5.49 $38.70 per m 2 gross floor area The Corporation of the City of North Vancouver Page 4 Bylaw, 2016, No Document: v1

6 CERTIFIED RESOLUTION OF COUNCIL: I hereby certify that this is a true copy of a resolution passed by the Council of the City of North Vancouver at its Regular meeting of March 7,2016: Moved by Councillor Buchanan, seconded by Councillor Clark RECOMMENDATION: "PURSUANT to the report of the Deputy Director, Finance, dated March 2,2016, entitled "Development Cost Charge Review and Update": THAT "Development Cost Charges Bylaw, 2016, No. 8471", be given introduction and first reading; THAT staff be directed to forward "Development Cost Charges Bylaw, 2016, No. 8471", to the Urban Development Institute for feedback and published on the City's website for public input; AND THAT staff report back to Council on the input received. CARRIED UNANIMOUSLY'' Dated at North Vancouver, BC, this 8th day of March, City Clerk

7 i;. 0 > Wmk MjSPm ::: The Corporation of THE CITY OF NORTH VANCOUVER FINANCE DEPARTMENT REPORT To: From: SUBJECT: Date: Mayor Darrell R. Mussatto and Members of Council Navin Chand, Deputy Director of Finance DEVELOPMENT COST CHARGE REVIEW AND UPDATE March 2, 2016 File No: /2016 The following is a suggested recommendation only. Please refer to Council Minutes for adopted resolution. RECOMMENDATION: PURSUANT to the report of the Deputy Director of Finance, dated March , entitled "Development Cost Charge Review and Update;" THAT the Development Cost Charges Bylaw, 2016 introduction and first reading; No be given AND THAT staff be directed to submit it to the Urban Development Institute for feedback and onto the City's website for public input; AND THAT staff report back to Council on the input received. ATTACHMENTS: 1. Draft Report - Development Cost Charge Review 2. Development Cost Charge Presentation by Urban Systems 3. Development Cost Charges Bylaw, 2016, No PURPOSE: This report accompanies Urban Systems report and presentation detailing the proposed revisions to the City's Development Cost Charge (DCC) program. REPORT: Development Cost Charge Review and Update Date: March 2, 2016 Page 1 of 7 Document; v1

8 BACKGROUND: Development Cost Charges (DCC's) are levies collected by local governments to assist in financing the costs of infrastructure and parks expenditures required to service new growth. Section 559 of the Local Government Act provides the authority for municipalities to collect DCC's through its DCC bylaw. The intent of a DCC program is to ensure that new development pays their equitable share of growth related costs. DCC's are a dedicated source of funding and must be used to acquire or construct the works for which they were intended for. Any funds collected through DCCs must be retained in a separate reserve fund and, together with the earned interest, set aside for future DCC projects. The City's existing DCC bylaw, Bylaw No. 6814, 1997, was adopted in The City currently collects both a Roads DCC and a Parks DCC under this bylaw. DISCUSSION: The City has experienced a number of changes in land patterns, construction costs, population and density growth, as well as transportation and infrastructure expansion requirements since The implementation of a revised DCC program is timely with recent amendments to the Parks Master Plan, the Transportation Plan, and the revision of the Official Community Plan. The Ministry of Community, Sport and Cultural Development prepared the Development Cost Charge Best Practices Guide which recommends that DCC Bylaws be updated every 5 years. Urban Systems was awarded the contract for the DCC review and update through a Request for Proposal process completed in 2013 and have enclosed a Development Cost Charge Review report and a presentation (Attachment 1 and 2). This comprehensive DCC review spans City wide capital expenditure forecasts and reflects growth projections. This also provides the City with a structured Development Cost Program to assist in funding the cost of upgrading and expanding streets and parks Infrastructure and developing parkland required to support new development. In addition, the DCC program has been expanded to include the water system, sanitary sewer system and drainage system. Growth Projections The residential growth projections used in the DCC Review are based on the OCP and discussions with staff. The projection includes existing lands currently zoned but not developed or remaining lands in planned neighbourhoods where the type of land use is known. The commercial and industrial growth projections were based on trends of past years etc. Project Cost Estimates Staff have reviewed the DCC Transportation, Parks, Water, Sanitary and Drainage Program and identified capital costs based on industry knowledge and experience. Regular assessment of project costs is suggested. Cost sharing funding options have REPORT: Development Cost Charge Review and Update Date: March 2, 2016 Page 2 of 7 Document: vl

9 been integrated into the DCC program, whereby staff anticipate funding based on past funding strategies from certain agencies and other government programs. Urban Systems' DCC Report (Attachment 1) discusses distinct factors that dictate DCC funding allocation for new projects related to new growth and project upgrades resulting from population increases. Appropriate allocation is determined by using two broad categories: i 1. Projects that upgrade service levels or resolve existing deficiencies 2. Projects that are solely purposed to accommodate new growth The proposed program considers these categories and assigns growth related percentages to each capital project, identifying the amount of DCC Recoverable costs to be allocated. The City recognizes that project costs should be distributed equitably between new development and existing community where there is a mutual benefit. An allocation of 50% benefit to new growth and 50% benefit to the existing community has been used for all but acquisition of new parkland, which is seen as being fully attributable to new growth. Additional factors considered in developing the DCC program include type of land use, projected developments, timelines for works and services, and the impact of DCC rates on development levels. Assist Factor The Local Government Act requires that an assist factor be included as part of the DCC calculations. This factor represents the City's contribution towards the capital costs of the projects attributed to new development. The municipal assist factor is a discretionary value that is determined by the City; however, the Ministry requires a minimum allowance of 1% of the DCC Calculation. The proposed DCC amendments have included a 1% municipal assist factor. Proposed New Transportation DCC The previous Transportation DCC program related to a single transportation project, the Lower Level Route connector road which has been constructed. The proposed DCC program includes projects principally focused on required multi-mode transportation such as bicycle routes, bridges, sidewalks etc. (Attachment 1 - Appendix A). The proposed costs assigned to the Transportation DCC program is $35.15 million, of which $6.70 million is funded by grants, $14.08 million is DCC recoverable, with the remaining $14.37 million funded by other municipal programs. Proposed New Parks DCC The proposed Parks DCC program includes acquisition of park land and prescribed parks works that include development of parks, trails, and greenways throughout the City (Attachment 1 - Appendix B). REPORT: Development Cost Charge Review and Update Date: March 2, 2016 Page 3 of 7 Document: v1

10 I The proposed costs assigned to the Parks DCC program is $40.72 million, of which $50,000 is funded by grants, $31.76 million is DCC recoverable, with the remaining $8.91 million funded by other municipal programs. Proposed Water DCC The proposed Water DCC includes the expansion of our existing water infrastructure (Attachment 1 - Appendix C) to accommodate new growth. The proposed costs assigned to the Water DCC program is $6.54 million, of which $3.24 million is DCC recoverable, with the remaining $3.30 million to be funded by annual water utility rates/reserves. Proposed Sanitary DCC The proposed Sanitary DCC includes the expansion of our existing sanitary sewer infrastructure (Attachment 1 - Appendix D) to accommodate new growth. The proposed costs assigned to the Sanitary DCC program is $6.38 million, of which $3.16 million is DCC recoverable, with the remaining $3.22 million to be funded by annual sewer utility rates/reserves. Proposed Drainage DCC The proposed Drainage DCC includes the expansion of our existing drainage infrastructure (Attachment 1 - Appendix E) to accommodate new growth. The proposed costs assigned to the Drainage DCC program is $1.49 million, of which $740K is DCC recoverable, with the remaining $750K to be funded by drainage levy. DCC Rates Summary The following table presents a comparison of the existing and proposed DCC rates. Land Use Single Family* Duplex Townhouse Apartments Commercial Industrial Unit Per lot Per m 2 of building Per m 2 of building Per m 2 of building Perm 2 of building Per m 2 of building Existing DCC rates $12,821 $49.29 $49.29 $49.29 $57.35 $16.82 Proposed DCC Rates $14,749 $62.17 $62.17 $62.17 $58.03 $38.70 * It Is important to note that under the existing DCC Bylaw that the Single Family DCC Rate is charged on a square metered basis. However the new proposed DCC Bylaw charges Single Family on a per lot basis which is consistent with the other municipalities. The proposed DCC Rates are higher than the existing rates since the DCC Program has been expanded to include three new categories (Water, Sewer and Drainage). In addition, the proposed Transportation and Parks DCC Programs are much more comprehensive than the original bylaw approved in Note that DCC's apply to the net increase in demand. Where an existing building is being demolished (within two years) and replaced by a larger building or the use is changing, DCC's will be calculated REPORT: Development Cost Charge Review and Update Date: March 2, 2016 Page 4 of 7 Document: vl

11 by giving credit to the existing building being demolished. This credit is based on the size of the building at the DCC value for its former use. However, it is important to note that despite the proposed increase in the DCC rates, the City's Rates would be in line with most municipalities in the Metro Vancouver Region. The City's largest projected source of residential DCC collection is from the Apartment category. The proposed DCC Bylaw would increase the Apartment DCC rate by approximately 26% which is equivalent to an annual compounded rate increase of 1.23% since A comparison of the City's proposed Apartment DCC Rates with some of the other Metro Vancouver municipalities is provided below: Apartment DCC Comparison Rates (per sq.m. GFA) Surrey (2015) $ Port Coquit'am - Area 2 (2010) $ White Rock (Proposed) (2016) $ Coquitlam (Proposed 2016) ^ $ North Vancouver (District) (2015) $98.60 North Vancouver (City) (Proposed) (2016) $62.17 New Westminster - Mainland Area (2016) $55.41 Water DCC Sewer DCC HRcadsDCC Drainage DCC Parkland DCC North Vancouver (City) (Existing) (1997) $49.29 Port Moody (1993) $39.35 Burnaby (2002) $38.20 $50 $100 $150 $200 It is also important to note on the above graph the change in distribution from a Parks DCC collection focus under the existing City Bylaw to a more comprehensive program which includes transportation, water, sewer and drainage. A comparison of the City's proposed DCC Rates by Single Family, Townhouse, Apartment, Commercial, and Industrial compared to other Metro Vancouver municipalities can be found in the Urban Systems power point (Attachment 2 - slides 17 to 21). The following table presents a comparison of the City's proposed DCC rates and the District of North Vancouver's (DNV) existing DCC Rates: Land Use Single Family Duplex Townhouse Apartments Commercial Industrial Unit City Proposed DCC Rates DNV Existing DCC Rates Per lot $14,749 $15,709 Per m 2 of building $62.17 $93.11 Per m 2 of building $62.17 $93.11 Per m 2 of building $62.17 $98.60 Per m 2 of building $58.03 $58.83 Per m 2 of building $38.70 $43.18 REPORT: Development Cost Charge Review and Update Date: March 2, 2016 Page 5 of 7 Document: v1

12 Note that the proposed City DCC Rates are lower than the existing DNV Rates. The DNV adopted their existing DCC Bylaw on April 29, 2013 which became effective November 1, Public participation process The Local Government Act does not require a public participation process; however, the British Columbia Best Practices Guide suggests that the public be engaged in the development of the DCC program. Although Developments Cost Charges are a useful mechanism for financing new growth, the impact of DCC revisions should be considered to ensure that the proposed rates are not excessive or discourage development. With this in mind, staff recommends submitting the proposed DCC program to the Urban Development Institute for their feedback and onto the City's website for public input prior to adoption of the program. If Council directs staff to proceed, the DCC Amendment process is noted below: «Council endorses first reading of the DCC amendment bylaw and rates and directs staff submit it to the Urban Development Institute for feedback and onto the City's website for public input Staff receive feedback from the Urban Development Institute and the public and make any necessary adjustments Council endorses the second and third reading of the DCC Amendment bylaw at one council meeting DCC bylaw and background report are sent to the Inspector of Municipalities for approval DCC bylaw with Ministry approval receives fourth reading by City council New DCC bylaw becomes effective after council gives fourth reading The Local Government Act protects in-stream subdivision and building permit applications from the new DCC rates for a period of one year. Any new subdivision and building permit applications will be subject to the new rates immediately. Ongoing DCC Updates Periodic review of the Development Cost Charge program is recommended to ensure the DCC program remains consistent with City development plans and reflects updated construction costs. FINANCIAL IMPLICATIONS; The Project Plan has factored the proposed DCC bylaw as a source of funds. Should the program not be approved, additional funding sources will be required and some projects may be delayed as a result. REPORT: Development Cost Charge Review and Update Date: March 2, 2016 Page 6 of 7 Document: v1

13 INTER-DEPARTMENTAL IMPLICATIONS: This review is the result of a coordinated effort between Urban Systems and City Staff representatives from Community Development, Engineering, Parks and Environment, and Finance. This report was endorsed by the Major Projects Committee on March 1, STRATEGIC PLAN IMPLICATIONS The proposed DCC revisions would support a broad number of goals in the City's Strategic Plan including balancing social and economic needs of the community, providing a prescribed program for current and future DCC capital works, establishing adequate DCC reserves to assist in funding the cost of upgrading and expanding infrastructure and acquiring and developing parkland required to support new development. RESPECTFULLY SUBMITTED: Navin Chand Deputy Director of Finance REPORT: Development Cost Charge Review and Update Date: March 2, 2016 Page 7 of 7 Document; v1

14 CITY OF NORTH VANCOUVER 2016 Development Cost Charge Review Draft Report March

15 DCC REVIEW Draft Report Prepared by: Urban Systems Ltd. # Homer Street Vancouver BC V6B 2W9 T: W: Contact: Dan Huang, Senior Planner T: E: March 2016 USL File: This report is prepared for the sole use of City of North Vancouver. No representations of any kind are made by Urban Systems Ltd. or its employees to any party with whom Urban Systems Ltd. does not have a contract

16 TABLE OF CONTENTS EXECUTIVE SUMMARY... 1 PART 1. BACKGROUND Background and Purpose of this Review Legislative and Regulatory Background Recent Legislative Changes DCCs Levied by Other Authorities Use of DCC Best Practices Guide... 4 PART 2. PUBLIC PARTICIPATION Public Participation Process... 6 PART 3. DEVELOPING THE DCC PROGRAM AND COSTS -GUIDING PRINCIPLES Relationship to Other Municipal Documents DCC Time Frame Community-Wide and Area-Specific DCC Charges DCC Recoverable Costs Grant Assistance Interim Financing Allocation of Costs Municipal Assist Factor Units of Charge PART 4. GROWTH PROJECTIONS Residential Commercial Industrial PART 5. TRANSPORTATION DCCS Transportation DCC Program Traffic Generation and Calculation of Road Impact Transportation DCC Calculation PART 6. PARK ACQUISITION AND DEVELOPMENT DCCS Park Acquisition and Development DCC Program and Rates Calculation of Equivalent Units for Park Acquisition Park Acquisition and Development DCC Calculation PART 7. WATER DCCS Water DCC Program Water Demand and Calculation of Equivalent Population Water DCC Calculation Page (i) March, 2016

17 PART 8. SANITARY SEWER DCCS Sanitary Sewer DCC Program Sanitary Sewer Demand and Calculation of Equivalent Population Sanitary Sewer DCC Calculation PART 9. DRAINAGE DCCS Drainage DCC Program and Rates Calculation of Equivalent Units for Drainage Drainage DCC Calculation...33 PART 10. DCC RATES SUMMARY AND IMPLEMENTATION Summary of Proposed DCC Rates Bylaw Exemptions Collection of Charges Building Permit and Subdivision Collection of DCCs on Redeveloped or Expanded Developments In-Stream Applications and Grace Periods DCC Rebates and Credits DCC Monitoring and Accounting DCC Reviews TABLES Table 1 Total DCC Program Recoverable Costs... 1 Table 2 City of North Vancouver Proposed DCC Rate Summary... 3 Table 3 Greater Vancouver Sewerage and Drainage DCCs... 4 Table 4 Allocation of Costs Attributable to New Growth Table 5 Municipal Assist Factor by DCC Type Table 6 Distribution of Population Growth by Dwelling Type Table 7 Non-Residential Growth Projections Table 8 Transportation DCC Program Costs Table 9 Equivalent Units for Transportation Table 10 Proposed Transportation DCC Rates Table 11 Park Acquisition & Development DCC Program Costs Table 12 Equivalent Units for Park Acquisition Table 13 Proposed Park Acquisition & Development DCC Rates Table 14 Water DCC Program Costs Table 15 Equivalent Units for Water Table 16 Proposed Water DCC Rates Table 17 Sanitary Sewer DCC Program Costs Table 18 Equivalent Units for Sanitary Sewer Page (ii) March, 2016

18 Table 19 Proposed Sanitary Sewer DCC Rates Table 20 Drainage DCC Program Costs Table 21 Equivalent Units for Drainage Table 22 Proposed Drainage DCC Rates Table 23 City of North Vancouver Proposed DCC Rate Summary EQUATIONS Equation 1 Transportation DCC Calculation Equation 2 Park Acquisition & Development DCC Calculation Equation 3 Water DCC Calculation Equation 4 Sanitary Sewer DCC Calculation Equation 5 Drainage DCC Calculation APPENDICES Appendix A Transportation Program and Calculations Appendix B Park Acquisition and Development Program and Calculations Appendix C Water Program and Calculations Appendix D Sanitary Sewer Program and Calculations Appendix E Drainage Program and Calculations Appendix F Existing City of North Vancouver Development Cost Charge Bylaw No. 6814, 1995 Appendix G Proposed City of North Vancouver Development Cost Charge Bylaw No. 8471, 2016 Appendix H Public Consultation Materials (to follow) Page (iii) March, 2016

19 EXECUTIVE SUMMARY This report presents proposed Development Cost Charges (DCCs) that reflect growth projections and DCC capital programs for the City of North Vancouver. The report consists of the following parts. Part 1 of the report outlines the purpose of the DCC review and includes information on the legislation enabling DCCs, DCCs levied by other jurisdictions, and the use of the DCC Best Practices Guide. In Part 2, the public consultation process is reviewed. Part 3 outlines the guiding principles used to develop the DCC program and identify DCC recoverable costs. This part discusses the time frame for the DCC program, the explanation for applying DCCs on a communitywide or area-wide basis, the allocation of costs between existing and new development, the municipal assist factor, grant assistance and interim financing. In Part 4, growth projections for the City of North Vancouver are presented. Based on the projected growth identified in the OCP and discussions with staff, the growth for the different land uses is forecast. Parts 5 to 9 summarize the costs of each DCC program (i.e. transportation, water, sanitary sewer, drainage, park acquisition and improvement). The total capital costs for each service and the total DCC program costs are as follows: Table 1 Total DCC Program Recoverable Costs Service Total Capital Costs Grants DCC Recoverable Program Costs Municipal Costs (1) Transportation $35.2 M $6.7 M $14.1 M $14.4 M Park Acquisition & Development $40.7 M $50,000 $31.8 M $8.9 M Water $6.5 M $ - $3.2 M $3.3 M Sanitary Sewer $6.4 M $ - $3.2 M $3.2 M Drainage $1.5 M $ - $736,560 $751,440 Total $90.3 M $6.7 M $53 M $30.6 M Note: (1) Includes municipal assist factor Parts 5 to 9 also show how the DCC rates are calculated using the information from Parts 3 and 4. The proposed DCC rates are shown in Table 2. Page ES / March, 2016

20 Part 10 includes information on implementation issues such as exemptions to the bylaw, grace periods, DCC rebates and credits, as well as suggestions for monitoring and accounting related to the DCC bylaw. Page ES / March, 2016

21 Table 2 City of North Vancouver Proposed DCC Rate Summary Transportation Park Acquisition & Development Water Sanitary Drainage Total Development Cost Charge Single Family $5,315 $4,614 $1,513 $1,477 $1,830 $14,749 per lot Duplex $20.89 $21.48 $7.04 $6.88 $5.88 $62.17 Townhouse $20.89 $21.48 $7.04 $6.88 $5.88 $62.17 per m 2 of gross floor area per m 2 of gross floor area Apartment $20.89 $21.48 $7.04 $6.88 $5.88 $62.17 per m 2 of gross floor area Commercial $48.32 $2.56 $0.84 $0.82 $5.49 $58.03 Industrial $28.99 $2.56 $0.84 $0.82 $5.49 $38.70 per m 2 of gross floor area per m 2 of gross floor area Page ES / March, 2016

22 PART 1. BACKGROUND Points Covered Purpose of this Review Legislative and Regulatory Background Recent Legislative Changes DCCs Levied by Other Authorities DCC Best Practices Guide Page / March, 2016

23 1.1 Background and Purpose of this Review The last review of the City of North Vancouver Development Cost Charge (DCC) programs and rates was completed in The City deleted a specified area component of the DCC bylaw in 2002 and in 2010 added text to allow for the reduction of DCCs for not-for-profit rental housing and for-profit affordable rental housing. This DCC review is meant to be a major DCC bylaw update. A number of infrastructure studies have been completed and the City has amended the Official Community Plan (OCP) and Zoning Bylaw. Capital costs for all projects have been updated to reflect current construction costs. The current DCC bylaw levies DCCs for transportation, park acquisition and improvement. The current DCCs are levied community-wide and apply to residential, commercial and industrial land uses. Currently, most engineering infrastructure required to support growth is provided on a project by project basis as development is approved by the City of North Vancouver. The engineering infrastructure developers are required to build is specific to meet their unique needs and satisfy municipal regulations. The 1997 DCC bylaw has a single DCC rate for all residential land uses including single family, townhouse and apartments. The residential DCC is collected at building permit. The commercial and industrial DCCs are collected at building permit. The current DCCs are levied based on the actual gross floor area of the building collected at the time the building permit is issued. For residential subdivisions a covenant is placed on the properties and the DCC is payable at the time of issuance of the building permit. The proposed programs ensure that the people who will use and benefit from the services provided pay their share of the costs in a fair and equitable manner. The proposed DCC programs create certainty by providing stable charges to the development industry and by allowing the orderly and timely construction of infrastructure. It should be noted that the material provided in the background report is meant for information only. Reference should be made to the current Bylaw No. 6814, 1997 and subsequent amendments (Bylaw No. 7388, 2002 and Bylaw No. 8130, 2010) for the specific DCC rate for all development within the City until the City Council has adopted a new DCC bylaw. 1.2 Legislative and Regulatory Background Development cost charges are special charges collected by local governments to help pay for infrastructure expenditures required to service growth. The Local Government Act (LGA) provides the authority for municipalities to levy DCCs. The purpose of a DCC is to assist the municipality with accommodating development by providing a dedicated source of funding for the capital costs of: Providing, constructing, altering or expanding sewage, water, drainage and transportation facilities (other than off-street parking); and Page / March, 2016

24 Providing and improving parkland. Municipalities wanting to collect DCCs must adopt a DCC bylaw that specifies the amount of the DCCs that will be collected. The charges may vary with respect to: Different zones or different defined or specific areas; Different uses; Different capital costs as they relate to different classes of development; and Different sizes or different numbers of lots or units in a development. Funds collected through DCCs must be deposited in separate reserve accounts. These funds may only be used to pay for the capital costs of the works and short-term financing costs of a debt incurred for capital works identified in the DCC program. The costs for capital works include not only the actual construction of the works but also the planning, engineering and legal costs which are directly related to the works, as well as improving parkland if a parkland acquisition and improvement DCC is established. 1.3 Recent Legislative Changes In 2008 the Provincial Government revised the legislation pertaining to DCCs, which provided the option for municipalities to exempt or waive DCCs for the following classes of eligible development : Not-for-profit rental housing, including supportive living housing (similar provisions were in the previous legislation, but did not require a bylaw to waive or reduce DCCs for not-for-profit rental housing); For-profit affordable rental housing; Subdivisions of small lots designed to result in low greenhouse gas emissions; and Developments designed to result in a low environmental impact. North Vancouver currently provides a 100% waiver of DCCs for not-for-profit rental housing, and reduces DCCs by 50% for for-profit rental housing. The DCC bylaw does not include exemptions or waivers related to other types of eligible development. Low impact/green development practices are not expected to have a significant impact on the City s DCC program at this time (i.e., these practices are not expected to reduce the need for identified DCC projects); therefore, providing DCC waivers or reductions for this type of development would not likely result in a decreased impact on infrastructure. Providing DCC waivers or reductions may not be effective incentives for development in North Vancouver. In general, DCC costs are typically a fairly small portion of development costs, which have historically been driven by land costs. Page / March, 2016

25 More recently, in 2014, the Local Government Act was amended to provide in-stream protection to applicants at time of building permit, to provide developers with 12 months protection from increases to DCCs. The same level of protection currently exists for in-stream subdivision applications with a similar protection period of 12 months. In addition, the legislation also protects precursor applications for rezoning and/or development permits which are linked to building permits, with the same 12-month protection period. 1.4 DCCs Levied by Other Authorities In addition to the DCCs levied by the municipality, developers are often also required to pay regional DCCs. In North Vancouver, the City is required to collect regional DCCs on behalf of the Greater Vancouver Regional District. Currently, the Greater Vancouver Regional District charges DCCs for sewerage and drainage (Table 3). Table 3 Greater Vancouver Sewerage and Drainage DCCs Land Use Rate Single Detached Residential Use (per unit) $1,291 Townhouse Residential Use (per unit) $1,129 Apartment Residential Use (per unit) $807 Non-Residential Use (per sq. ft. of floor area) $0.605 *Source: Greater Vancouver Regional District, Development Cost Charge Bylaw No Use of DCC Best Practices Guide The Ministry of Community, Sport and Cultural Development (the Ministry ) has prepared a Development Cost Charge Best Practices Guide (the Best Practices Guide ). The purpose of this document is to outline an accepted process to develop a DCC program. Municipalities that follow this recommended process qualify for streamlined Ministry review of their DCC program. This report was developed in consideration of the Best Practices Guide. Page / March, 2016

26 PART 2. PUBLIC PARTICIPATION Points Covered Consultation Process Page / March, 2016

27 2.1 Public Participation Process Although the LGA does not require a public participation process, the Best Practices Guide does suggest that an opportunity for public participation be included as part of the formulation of the DCC program. The purpose of such a process is to allow those who are interested in or affected by the proposed DCCs to offer comments and input. The Best Practices Guide does not set a recommended format to be followed for public participation; instead, the type of public participation to be used is decided by the municipality itself. (This section will be completed following any public engagement in The City proposes to send a referral letter to the Urban Development Institute for comment, and to post information on the proposed DCC Bylaw to the City s website.) Page / March, 2016

28 PART 3. DEVELOPING THE DCC PROGRAM AND COSTS - GUIDING PRINCIPLES Points Covered Relationship to Other Municipal Documents DCC Time Frame Community-Wide and Area-Specific DCCs Recoverable Costs Grant Assistance Interim Financing Allocation of Costs Municipal Assist Factor Units of Charge Page / March, 2016

29 3.1 Relationship to Other Municipal Documents This DCC program has been developed to be consistent with the following legislation, plans, and policy guides: Local Government Act Development Cost Charges Best Practices Guide City of North Vancouver Development Cost Charge Bylaw No. 6814, 1997 City of North Vancouver Development Cost Charge Bylaw No. 7388, 2002 City of North Vancouver Development Cost Charge Waiver Bylaw No. 8130, 2010 City of North Vancouver Official Community Plan, 2014 City of North Vancouver Zoning Bylaw No. 6700, 1995 City of North Vancouver Five Year Financial Plan City of North Vancouver DCC Reserves 3.2 DCC Time Frame The first step in determining DCC costs is to set a time frame for the DCC program. The time frame for the City of North Vancouver DCC program is to The capital expenditure forecasts include all of the DCC projects that need to be constructed to allow for anticipated development within this time frame. 3.3 Community-Wide and Area-Specific DCC Charges In a community-wide DCC, the same DCC rate is applied for each land use deemed to generate a similar or same capital cost burden regardless of the location of the development. An area-specific DCC typically divides the community into different areas according to geographic or other distinctive areas based on technical reasons. For example, it would be appropriate to establish an area-specific DCC for an area that is uniquely serviced by a series of specific water works, which can only service that particular area due to the unique location and circumstances of the area. The questions contemplated in concluding that a community-wide DCC is the best alternative for the City of North Vancouver DCC include the following: 1. What does the Provincial DCC Best Practise Guide (BPG) recommend? 2. How is the existing DCC bylaw applied? 3. Who benefits from the capital works in a direct or indirect manner? 4. Is a community-wide DCC a fair manner to distribute the costs in relationship to the development of land throughout the City? Page / March, 2016

30 5. What are the cash flow implications of collecting area-specific DCCs vs. community-wide DCCs on a community the size of City of North Vancouver with the City s specific DCC capital program? How will the manner of DCC collection affect the City s ability to get the DCC program built? 6. What are the typical complexities and costs of establishing the community-wide vs. area-specific DCC? 7. Does a community-wide DCC support growth throughout the City in a more cost effective manner? The answers to the questions above led to the conclusion that a community-wide DCC rate structure is the best alternative to implement the DCC capital program. The community-wide DCCs give the City the most flexibility in terms of accumulating and spending DCC revenues. Area-specific DCCs can limit the amount of DCCs available to fund works throughout the City by having multiple DCC reserves with a small amount in different reserves. This can result in long time frames to collect a significant amount of DCCs to build any works in a timely manner. Having DCCs collected community-wide for capital works gives the City the flexibility to construct DCC works anywhere in the City. This can be beneficial should development shift from one area in the City to another area over time. If all areas develop in a slow manner the DCCs available in a community-wide DCC program will allow the City to respond to changes in development patterns throughout the City. Having a community-wide DCC can reduce the complexity of collecting the DCC and cost of administering the DCC reserves. A community-wide DCC bylaw is often a simpler document to apply by front counter staff as well and can reduce the staff time required to assess, collect and expend the DCCs. We believe the reduced administration effort from having a community-wide DCC can be significant. 3.4 DCC Recoverable Costs As specified by the Local Government Act, the DCC recoverable costs for the projects include construction costs, contingency, engineering and administration. The capital costs included in this report do not include charges for interim financing. As stated in the Ministry s Development Cost Charge Best Practices Guide, the Inspector of Municipalities will consider allowing interest costs in relation to: Fixed-capacity infrastructure; Out-of-sequence projects; and Greenfield development. Page / March, 2016

31 At this time the City of North Vancouver has not identified any projects that require long-term debt financing that meet the Ministry guidelines. 3.5 Grant Assistance Twelve of the transportation projects will be partially funded through grants. The details are provided in the Transportation Program (Appendix A) in the column entitled Cost Sharing. Cost sharing is anticipated from Translink, BC Transit and the Ministry of Transportation and Infrastructure. The projects identified are consistent with past funding strategies of these government agencies and major provincial infrastructure programs. Due to the size, nature and type of projects these major transportation projects all require grants for the works to proceed in a timely manner. 3.6 Interim Financing The capital costs shown in the report do not include interim financing. 3.7 Allocation of Costs For each proposed infrastructure project, costs are allocated between the existing development and new growth. To determine the proper allocation for each project, individual projects can be divided into two broad categories: 1. Projects that upgrade the level of service or resolve existing deficiencies; and 2. Projects that are required solely to accommodate new growth. Projects in the first category provided some benefit to existing development, but they also benefit new growth. In order to allocate the degree of benefit equitably between the existing population and new growth, only a portion of project costs are allocated to new growth. For projects in this category, the benefit to growth is 50%. Projects in the second category benefit new growth only. In other words, they would not be contemplated if no new growth were forecasted. One hundred percent (100%) of the benefit and cost of each project in this category has been allocated to new growth. As for new projects in the first category, the City considers the following factors when determining what percentage to allocate to new growth: Current standards of servicing required by the City. Page / March, 2016

32 Whether the work on the project is primarily for upgrading deficiencies and upkeep of the system or whether it is primarily for increasing capacity. A comparison of what the size of the project would be if the project was for the existing population, versus what the size of the project would be if the project was expanded to accommodate the new growth as well. The proximity of the project in relation to where development is anticipated to occur within the City and the degree to which the development depends on the project in order to ensure that development occurs. The following table indicates, in general terms, the percentage of the costs that are attributable to new growth according to the type of service. Numbers less than 100% indicate category one projects that benefit both new growth and the existing population. The number 100% indicates category two projects that benefit new growth alone. Table 4 Allocation of Costs Attributable to New Growth DCC Type Benefit Factors % Transportation 50% Park Acquisition & Development % Water 50% Sanitary 50% Drainage 50% In each of the DCC programs (Appendix A - E), the exact percentage of the benefit that can be attributed to new growth is indicated in the column entitled Benefit Factor. That factor is applied to the estimated costs to arrive at the amount that can be recovered by DCCs before the municipal assist factor is applied. That information can be found in the column entitled Benefit to New Development in all of the DCC programs. 3.8 Municipal Assist Factor The LGA recognizes that it would be unfair to impose on new development all of the costs that are attributable to new development. As such, the LGA stipulates that an assist factor will be included as part of the calculation of the DCCs. An assist factor represents the City s contribution towards the capital costs for the projects that are attributed to new development. This contribution is in addition to the costs that were allocated in the calculations to the existing population and that are to be paid by the City. The portion Page / March, 2016

33 of the costs that the City will have to cover because of the assist factor will have to be financed through other means available to the City, such as utility fund revenue. The actual level of the assist factor is determined by the City. While the City can have a different assist factor for each type of capital works, i.e. water and sanitary, the City cannot have a municipal assist factor that varies for different land uses within the City, i.e. single detached dwelling residential, townhouse residential, commercial, etc. According to the LGA, the City should consider the following factors when setting DCC rates: Future land use patterns and development; The phasing of works and services; Whether the charges are excessive in relation to the capital costs of prevailing standards of service; Whether the costs will deter development; or Whether the charges will discourage the construction of reasonably-priced housing or the provision of reasonably-priced serviced land. In consideration of all of the above matters, the assist factor has been set at the following rates for each type of DCC: Table 5 Municipal Assist Factor by DCC Type DCC Type Municipal Assist Factor Transportation 1% Park Acquisition & Development 1% Water 1% Sanitary 1% Drainage 1% 3.9 Units of Charge Single family dwelling DCCs will be levied at subdivision or in the case of redevelopment at the time of building permit based on the number of lots created by subdivision. Duplex, townhouse, apartment, commercial and industrial land uses will be levied the DCC at the building permit stage of development. Page / March, 2016

34 Duplex, townhouse, apartment, commercial and industrial DCCs will be levied per square metre of gross floor area. It is most efficient to collect the single family DCCs at the time of subdivision. Collecting the DCC at this point ensures the DCC is collected as early as possible in the development process to help in funding needed infrastructure. In multiple-family dwelling developments, the size and number of townhouses or apartments is often not known at the time of subdivision nor are there any guarantees as to the exact number of units that will be built. Therefore collection of the multiple dwelling DCCs at the building permit stage is more accurate in assessing the impact of the development not only because the number of units is known, but also because the unit size is known, which ultimately corresponds to the occupancy rate. Page / March, 2016

35 PART 4. GROWTH PROJECTIONS Points Covered Residential Commercial Industrial Page / March, 2016

36 4.1 Residential As shown on Table 6, the City is expected to grow by approximately 4,052 residential units by The projected growth is based on the development potential of existing areas that will most likely develop and a 10-year portion of the long term estimate has been used in the DCC program. The growth projections are based on the OCP and discussions with staff. The projection includes existing lands currently zoned but not developed or remaining lands in planned neighbourhoods where the type of land use is known. The total number of 4,052 units is allocated as follows: 26 units are expected to be single family dwelling; 134 units are expected to be duplex dwellings, 580 units are expected to be townhouse dwelling; 3,312 units to be apartment dwellings. Table 6 Distribution of Population Growth by Dwelling Type Dwelling Type New Units Persons per Unit New Population Single Family Duplex Townhouse ,450 Apartment (up to 6 storeys) 1, ,352 Apartment (taller than 6 storeys) 1, ,212 Total Residential Growth (to 2025) 7, Commercial To estimate future commercial and industrial development potential the trends of past years were reviewed. City staff anticipates the amount of available commercial and industrial space available for development will be 92,903 (1,000,000 sq. ft.) square metres. Based on past trends and available land the breakdown of the 92,903 square metres will be 95% commercial and 5% industrial lands. As shown on Table 7, 88,258 square metres of new commercial floor space is expected to be developed by Industrial Like the commercial growth projections, the industrial growth projections were based on information provided by City staff. As shown on Table 7, the City is expected to experience 4,645 square metres of new industrial floor area over the DCC program timeframe. Page / March, 2016